XLRI GMP 2013-14 (SEC-A)

Marketing Plan
Tide Detergent in India
Prof. Narasimhan Rajkumar

Abhisek Nag (G13001) Ankur Agrawal (G13008) Balamurli M. Nair (G13013) Dnyanesh Kabra (G13018)
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Submitted By:

Product Overview
The product chosen for this study is Tide, a brand of Proctor & Gamble for the Fabric wash/ laundry detergents market. Procter & Gamble (P&G) is an American multinational consumer goods company headquartered in downtown Cincinnati, Ohio, USA. Its products include foods, beverages, cleaning agents and personal care products. P&G is a renowned name in Hygiene & Health care and Home Products around the world. In India, P&G owns products like Ariel, Head and Shoulders, Pantene, etc. Tide was first introduced in the US in 1943. It was a major innovation at that time. It was first introduced in India in 2000, to be positioned against Hindustan Unilevers Rin. It was promoted on the plank of outstanding whiteness and excellent cleaning of colored clothes as well.

Currently, the market is controlled by four major players (HUL, P&G, Nirma and Ghadi). Together, they control nearly 80% of the market. Tide places itself in the medium priced segment (along with Rin and Henko). The premium segment has Ariel and Surf as major players. The low price segment is dominated by Nirma, Wheel and Ghadi.

The Indian Laundry Market

The total size of the fabric wash market was Rs. 14000 crores as of 2012. Of this, the low price segment accounts for major portion. The market penetration is an impressive 97%. Over the last 5 years, the market has grown by 14% a year in value terms. Most of this has been due to price increases and volume growths have been in single digits. Similar growth expectations are there for the near future. Most of the growth is expected from upward mobility to premium segments and launching of newer forms of the products.

The reported margins in this business range from 8% to 14%. Most published figures are those clubbed with the soaps segment, which has relatively higher margins. As the penetration shows, the market is a mature market. However, any imminent decline is not foreseen unless any major developments take place. Laundry is a necessary evil. During recession, consumers can stop buying clothes but they would want to keep their existing garments clean. This is an industry, which has been least hit by downturns. Further, there is no seasonality in the business, as washing clothes is inevitable in all seasons.

Category Factors
Category Factors are being analysed using Porters Five Forces Model

Threat of New Entrants

Existing companies like P&G and HUL may have certain advantages with the country-wide distribution channels. However, the entry barriers are not too high. Aspects Procter and Gamble Vs New Entrants Existing companies have strong distribution network Difficult for a new comer Verdict

Distribution Channel Strong distribution channel required for the detergent market Economies of Scale Fixed costs are lower

Shelf space occupancy is higher.

High Entry barrier

Existing companies have economies of scale Difficult for new entrants

Moderate entry barrier. P&G has some advantage.

Capital Investment High Capital requirements

Advertising expenses are high <TBD> is

Difficult to have such high marketing and advertising expense Switching cost for a customer is low.

Moderate entry barrier. P&G has some advantage. Low Barrier

Customer Switching

Hence easy for new entrants to woo the customers.

Bargaining power of buyers

High bargaining powers of the buyers Low switching cost for customers

Products are not well differentiated in their core value proposition Large number of alternatives available. Retail buyers (Big Bazar) are able to negotiate about pricing.

Bargaining power of suppliers

Low Bargaining of Suppliers Chemicals bought from suppliers are quite generic in nature. Low supplier switching cost Again companies in this category are the largest buyers for their suppliers. However suppliers also have choice. X% <TBD> of P&G supplies are from <TBD>. Soda Powder, Lemon, Bathing Soap

Pressure from substitute

Current rivalry in Category

Consumers in this category enjoy a multitude of choices for everything from cleaning products to bath washes. While many consumers prefer certain brands, switching costs in this industry are quite low. It does not cost anything for a consumer to buy one brand of detergent instead of another. This, along with a variety of other factors, makes the industry quite competitive.

Product and Competitor Analysis

Product
Tide gives outstanding whiteness due to its anti-redeposition global technology. Anti-redeposition Agents help keep soils from settling on clothes after they have been removed during the wash itself.

Price:
Tide was supposed to be a premium product when initially launched in India. Gradually it understood that India is a price sensitive market. Since, the usage of tide can be seen across all the segments of the market there are different products under the brand to cater to one and all. For the higher-class segment the flagship product Tide is used and for the lower class segment products like Tide Naturals, Tide Bar and the sachets are available in the market. Table # Represents the price of various packs of Tide Detergent Powder:

20 gm Powder Sachet 500 gm Powder Pack 1 kg Powder Pack 2 kg Powder Pack

Re 1

Rs 44 Rs 85 Rs 165 Rs 260

3.5 kg Powder Pack

Place
As per P&Gs policy, it measures customer satisfaction in two levels. Firstly, the consumer is not satisfied if the consumer goes to a shop to buy Tide and finds out that it is not available. So, the potential consumer ends up buying a rival product. This impacts the sales in two ways. The sale has gone down and the rival products sale has increased. The second and the more common of the two is that using the product does not satisfy the consumer. This problem states that there is some problem in the product and some modification needs to be done. Tide has been almost successful in passing through both the levels but when the comparison factor comes in it lags behind HUL as far as the distribution channel is concerned. The bigger issue is that in case a consumer moves to another product, it becomes difficult for the brand to re-connect with the consumer. It is almost like trying to convince the customer all over again. P&G plans to bring new techniques and ideas for improving its supply chain. It plans to Build collaborative supply chains at several levels.

Tides parent company Procter and Gamble are doing a good job and if they continue in the same way, the day will not be far when it too has a good distribution channel.

Ensure that the manufacturing sites serving both global and local customers are highly responsive to changes in demand, based on real time data for the stores.

Promotion
Tide is gaining popularity in India; it has been quite successful in the urban market and has impressed quite a few people as the quality is better as compared to its competitors. 5

TV and radio advertising are important channels to promote Tide which involves a good opening punch line. Using whiteness (safedi) as a base Tide has unleashed the campaigns.

Competition
Indian laundry market is classified into premium (Surf, Ariel), Mid price (Rin, Tide, Henko) and popular segments (Nirma, Wheel). Tide actually has four main competitors three of them are of the parent company HUL and one of Proctor and Gamble they are Surf, Rin, Wheel & Ariel.

Tide in order to compete with Wheel launched Tide Naturals which costs much lower than the original Tide, this also carries a risk of affecting the sales of the original tide detergent powder. Tide has always been compared to its rival brand Rin both the brands has tried to prove one was superior to the other in terms of whiteness. These two brands share a cut throat level of competition which can be gauged from a recent controversial advertisement where one of the brands had portrayed its superiority to the other brand and had shown when it comes to whiteness they are the leader. Tide has been slowly and steadily gaining popularity India especially in the metros and the urban areas it has gained wide scale acceptance by the common man especially due its superior quality and its ability to remove virtually any kind of stain. (Refer Appendix # A)

Generic Competition
Soda powder is famous amongst dhobis. Though it decreases the life of the garment, it is one of the biggest generic competitors to tide as there is a large segment of society which still uses the traditional way of washing clothes. Lemon is actually used by a lot of people to remove tough stains and is successful in doing so as well.

Bathing soap is used by people at times to wash their clothes. Lifebuoy is one such bathing soap which is used for almost all purposes in India.

Customer Analysis
Explored the Tide growth and opportunities in Urban and rural sectors, demographics, lifestyle, consumer loyalty, distinctive features, availability, etc. Tide has a huge growth potential in the rural sector and its main customer base is the middle class and low income women with age range of 1857. In a price sensitive (with low per capita income and low per capita detergent consumption) market like India, low priced yet quality detergent products from Tide hold an advantage. Tide targets both urban and rural markets with a variety of detergent products. 6

Segmentation
Urban/ Rural Tide was initially introduced as a premium product with high price in urban market (later repositioned). About three quarters of the Indian population are in the rural areas. The Indian rural market has been growing at 3-4% per annum accounts for close to 50% of the volume. The big reason for the growth is that India's rural consumers are steadily gaining more spending power. High potential of rural market provides a lot of opportunities for Tide detergent. Tide Naturals, which is a 30% cheaper version of its Tide detergent targeted at rural consumers. Within weeks of launch Tide Naturals shook up India's US$8 billion detergent market by clinching a 0.6% share of the market (According to AC Nelson centre for marketing research) Targets women from middle class families aged in the range18-57. Women belonging to this category hold the power to make decisions. Housewives are considered to be an important part of the market segment.

Demographics

PsychographicLifestyle

Behavioral- Loyalty

Changing lifestyle of people - People want cheap product with good quality. This is a trend nowadays. In addition, majority of Indian detergent consumers are price sensitive. The per capita income of Indians is very low (at Rs. 5,700 per month) compared to other nations For detergents, in India, there is no loyalty base. Also India is a price sensitive market. Consumers are more interested in affordability at a reasonable quality rather than sticking to a particular brand.

Consumer Behaviour
Social Class Middle class and low income families. Specific example: Low-priced variant of Tide-Tide Naturals

Usage Rate

The Indian fabric market consists of synthetic detergents (bars, powder and liquid). Per capita consumption of detergent in India (2.7 kg pa) is lower than most of the country.

Attractiveness (Selling Tide is good at removing all kinds of stains. It has all qualities required point to the Customer from a detergent. All Tide has a good fragrance. According to the Stain remover) company, Tide provides Outstanding Whiteness on white clothes & excellent cleaning on coloured clothes as well. Eg;- Tide's low temperature was detergent powder contains anti-redeposition technology which removes toughest possible stains. Also strong product cleaning and whitening performance via a dual surfactant system and brightener technology Affordable Tide is very affordable. Tide Plus price for 1 kg is 92 compared to say Ariel; priced at around 172 to 190 per kg

Distinctive (Quality/Low Perception)

Reachability (Product Availability)

Feature Tide is perceived as a quality product at a low price. This is a distinctive Price/ feature of Tide detergent. Since Tide was initially introduced as a premium product with high price in urban market, this has created a perception of Tide as a standard product in the minds to consumers. Tide is available in both retail stores and wholesales' stores. Tide detergent is available at kirana stores, big retail stores ' and wholesales stores. Tide Naturals is currently available at about 1.2 million outlets in India.

Targeting
Multi-segment Strategy Tide detergents provide different products to attract people from different economic strata. With the advent of Tide Naturals ,a cheaper product as compared to its flagship product, P&G was somewhat successful in snatching away a bit of market share in rural India. For promotion, Tide, in addition to the normal ads, also comes up with seasonal ads. Tide also advertises well on internet and takes customer feedbacks online.

Positioning
Initial positioning Procter and Gamble is known to produce strong brands, strong means something that is for the higher class market segments head and shoulders and Indian market in mid-2000 was launched as a premium brand and was being used mainly by the upper segment of the market as it was highly priced and so it could not capture a considerable portion of the market as cheaper substitutes for it were available in the market. Tide used superior technology and created fragrance oriented detergent powder. Tides USP has been its quality. It pays a lot of attention to the quality which reaches to its customers. Tide realised that it needs to cater to the mass and not a particular segment of the market, so they repositioned themselves Repositioning

After observing that tide was not capturing the lower segment of the market it repositioned itself by slashing down the price of the detergent. Tide also introduced detergent sachets which did not require any shelf space instead created it. The sachets were widely accepted by all the segments of the market. The competition in the detergent industry was cut throat as Tide was simultaneously competing with brands like Surf Excel, Surf Excel Blue, Rin. Tide, thus understood that in order to become the leader in the detergent industry they also have to compete with the cheaper substitutes like HULs Wheel and so they launched Tide Naturals in the market which has the fragrance of lemon and chandan and was priced much lower than the flagship Tide detergent. By slashing down the price of the product, Tide slowly repositioned itself as a product for the common man.

Appendix # A
Comparative Study of Detergent Powders Products Parent Company Price, Rs/ Kg Weights, gms % Market Share Adv. Spending, Rs crores Distribution Network** Packaging ** Premium Brands Ariel Surf Excel P&G HUL 182 180 Sub-Premium/ Regular Brands Henko Tide Rin Henkel P&G HUL 88 85 82 Janta Brands Wheel Nirma HUL Nirma 44 42

<Searching for appropriate data in each category>

Ranks Based on various performance parameters of Detergency (Rank 1-7)* Price is affordable Removes strains Fragrance is good Easily available in shops Soft on Skin Good performance for hard water Does not damage the clothes Good for white clothes Overall 7 2 1 3 1 2 2 2 2 6 1 2 1 2 1 1 1 1 4 6 4 6 4 5 5 4 5 5 4 3 4 3 4 3 3 3 3 5 5 2 5 3 4 5 4 2 3 6 5 6 6 6 6 6 1 7 7 7 7 7 7 7 7

* The ranks are decided as per the survey done with 12 respondents. We are planning to run the survey for the wider audience. ** 1 = Excellent, 2 = Very Good, 3 = Good, 4 = Fair, 5 = Poor

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